Disney and Florida Gov. Ron DeSantis have put an end to their feud with a deal that allows the entertainment giant to develop the Walt Disney World Resort near Orlando for the next 15 years.DeSantis and Disney, one of Florida’s biggest employers, had been embroiled in a dispute since 2022, when former Disney CEO Bob Chapek criticized a state legislative effort to limit classroom discussion of sexuality and gender issues for younger students. Critics described it as the “Don’t Say Gay” law.Under the agreemen ...

RinoCdZ Investment Thesis The Walt Disney Company (NYSE:DIS) produced a pretty solid set of Q2 results where underlying profitability improvements were obscured from view by a massive $2.1 billion one-off impairment. Without the impacts of these charges, Disney would have generated what I believe is a wonderful set of earnings data with multiple operational efficiency improvements along with their DTC business finally becoming profitable helping to bolster net income. The current share price suggests a 2 ...

In this articleDISTiana's Bayou Adventure opens June 28 at Walt Disney World Resort in Florida! The ride will take guests on a musical adventure picking up after the events of the Walt Disney Animation Studios film, "The Princess and the Frog." Guests will encounter fan-favorite characters including Prince Naveen, Mama Odie and more, plus all-new music.Disney | Olga ThompsonWe're almost there.Tiana's Bayou Adventure, the rethemed Splash Mountain, is set to reopen June 28 at Walt Disney World Resort in Orlan ...

Core Viewpoint - Nelson Peltz, an activist investor, has sold his shares in Walt Disney at $120 each, realizing a profit of approximately $1 billion, which may indicate limited near-term upside for the company [1][2] Group 1: Investor Actions and Market Performance - Peltz's exit follows a failed proxy fight, suggesting he may have lost confidence in his ability to influence Disney's direction [1] - Despite Peltz's departure, Disney's stock has outperformed the market in 2024, rising about 14%, compared to the S&P 500's 11% [2] - Selling at $120 suggests Peltz may not foresee significant short-term gains for Disney, as the stock was near its 52-week high [2] Group 2: Company Financials and Management Focus - Disney's revenue grew by only 1% to $22.1 billion in the first quarter, with projected adjusted earnings per share expected to rise by 25% for the fiscal year ending in September [3] - The streaming segment remains a concern, with a reported profit of $47 million on $5.6 billion in revenue, indicating a margin of less than 1% [3] - The overall streaming business, including ESPN+, reported an $18 million loss, although this is an improvement from a $659 million loss a year ago [3] Group 3: Strategic Changes and Future Outlook - Disney plans to enhance its bottom line by focusing on quality over quantity, including layoffs at Pixar Animation Studios [4] - The company aims to prioritize theatrical releases over short-form series for Disney+, which could lead to improved financial results [4] - Disney stock is currently trading at 19 times projected future earnings, lower than the S&P 500 average of 21, but uncertainties remain regarding the streaming segment and economic challenges [5]

Core Viewpoint - Walt Disney's stock has recently been underperforming, with a return of -4.3% over the past month compared to the S&P 500's +3.5% and the Media Conglomerates industry’s -10.4% [1] Earnings Estimates - For the current quarter, Disney is expected to report earnings of $1.19 per share, reflecting a year-over-year increase of +15.5%. However, the Zacks Consensus Estimate has decreased by -1.8% in the last 30 days [3] - The consensus earnings estimate for the current fiscal year is $4.76, indicating a +26.6% change from the previous year, with a slight decrease of -0.2% over the last month [3] - For the next fiscal year, the consensus estimate is $5.44, showing a +14.4% increase from the prior year, with a change of -0.6% in the past month [3] Revenue Growth - The consensus sales estimate for the current quarter is $22.94 billion, representing a year-over-year increase of +2.7%. For the current and next fiscal years, the revenue estimates are $91.15 billion and $95.66 billion, indicating changes of +2.5% and +5%, respectively [6] Recent Performance - In the last reported quarter, Disney generated revenues of $22.08 billion, a +1.2% increase year-over-year. The EPS was $1.21, compared to $0.93 a year ago [7] - The reported revenues were slightly below the Zacks Consensus Estimate of $22.13 billion, resulting in a revenue surprise of -0.23%. However, the EPS exceeded expectations with a surprise of +8.04% [7] Valuation Metrics - Disney's valuation is assessed using various multiples such as P/E, P/S, and P/CF, which help determine if the stock is fairly valued, overvalued, or undervalued [8] - The Zacks Value Style Score grades Disney as a C, indicating that it is trading at par with its peers [10] Overall Outlook - The Zacks Rank for Disney is 3 (Hold), suggesting that the stock may perform in line with the broader market in the near term [11]

Core Viewpoint - The broader market is experiencing a strong first half of 2024, but questions remain about the second half as stock valuations have increased significantly. Despite this, positive quarterly reports, optimism around generative AI, and expectations for lower interest rates support the recent stock appreciation [1]. Group 1: Lululemon (LULU) - Lululemon has faced a challenging start to the year, losing 39% of its value year-to-date, marking one of its worst sell-offs since late 2021 [3]. - Following a better-than-expected first-quarter report, Lululemon's stock surged 10% in after-hours trading, despite a toned-down guidance for Q2 [3][4]. - A notable highlight was a 78% sales growth from mainland China, indicating potential for future growth in the international segment [3]. Group 2: Snowflake (SNOW) - Snowflake's stock has not reflected the overall AI stock surge, experiencing a 43% decline from its 52-week highs [6][7]. - The company is focusing on AI with new tools to assist developers in creating next-generation AI applications, which could enhance its stock performance [6]. - Analysts have adjusted their financial models upward based on recent events, suggesting that Snowflake may be undervalued in the AI sector [6]. Group 3: Disney (DIS) - Disney's stock is up nearly 12% year-to-date, but recent challenges, including the loss of investor Nelson Peltz, have raised concerns [8]. - The stock trades at a modest forward price-to-earnings ratio of 18.8, indicating potential for recovery as the company invests $17 billion in its Florida parks [8]. - The travel and leisure industry is rebounding, which is expected to significantly benefit Disney's parks business, while the streaming platform Disney+ is on track for profitable growth [8][9].

Core Viewpoint - The Walt Disney Company reported a mixed performance in its Q2 fiscal 2024 earnings, with adjusted earnings per share beating estimates but revenues slightly missing consensus expectations. The company faces challenges in its media and entertainment segments while showing growth in parks and experiences [2][12]. Financial Performance - Adjusted earnings for Q2 fiscal 2024 were $1.21 per share, exceeding the Zacks Consensus Estimate by 8.04% and reflecting a 30.1% year-over-year increase [2]. - Total revenues rose 1.2% year-over-year to $22.08 billion but fell short of the consensus mark by 0.23% [2]. Segment Details - Media and Entertainment Distribution revenues, accounting for 44.4% of total revenues, decreased by 5% year-over-year to $9.79 billion [3]. - Linear Networks revenues declined by 7.8% year-over-year to $2.76 billion, while Direct-to-Consumer revenues increased by 13.2% year-over-year to $5.64 billion [3]. - Parks, Experiences and Products revenues, making up 38% of total revenues, increased by 9.8% year-over-year to $8.39 billion, with domestic revenues at $5.95 billion (up 6.9%) and international revenues at $1.52 billion (up 28.5%) [3]. Subscriber Metrics - Disney+ had 117.6 million paid subscribers as of March 31, 2024, up from 111.3 million at the end of 2023 [4]. - Domestic average monthly revenue per paid subscriber for Disney+ decreased from $8.15 to $8, while international average monthly revenue increased from $5.91 to $6.66 [4]. - Hulu ended the quarter with 50.2 million paid subscribers, an increase from 49.7 million in the previous quarter [4]. Operating Income - Total costs and expenses decreased by 1.7% year-over-year to $19.2 billion, leading to a segmental operating income of $3.84 billion, up 17% year-over-year [7]. - Direct-to-Consumer operating income improved to $47 million from a loss of $587 million in the previous year, driven by increased subscription revenues [8]. - Parks, Experiences and Products' operating income rose by 12.3% year-over-year to $2.28 billion [8]. Balance Sheet - As of March 31, 2024, cash and cash equivalents were $6.635 billion, down from $7.19 billion at the end of 2023 [11]. - Total borrowings decreased to $39.51 billion from $47.68 billion [11]. - Free cash flow for the quarter was $2.407 billion, significantly up from $886 million in the previous quarter [11]. Guidance - The company does not expect core subscriber growth at Disney+ in Q3 but anticipates improvements in Q4 [12]. - Disney forecasts a loss for Entertainment DTC in Q3 but expects modestly positive operating income from Entertainment Linear Networks [12]. - The company aims to meet or exceed a $7.5 billion annualized savings target by the end of fiscal 2024 and projects a full-year EPS increase of at least 25% from fiscal 2023 [12].

Group 1: Legal and Investment Developments - Disney is set to invest approximately $17 billion in building its 5th theme park in Florida, marking a resolution to nearly two years of litigation with Governor Ron DeSantis [1] - The company has agreed to donate up to 100 acres of its Disney World property for district-managed infrastructure projects and to award at least half of its construction contracts to Florida-based companies [1] - Disney will also spend a minimum of $10 million on affordable housing in central Florida [1] Group 2: Financial Performance - The Experiences division, which includes theme parks and consumer products, reported a 10% increase in revenue to $8.4 billion, with operating profit rising 12% to nearly $2.3 billion in the second quarter [2] - Growth was primarily driven by international markets, particularly Hong Kong Disneyland, while Walt Disney World and the cruise line also performed well [2] - Disneyland's results declined year-on-year despite increased attendance and per capita spending due to higher costs, including labor [2] Group 3: Stock Performance - Disney stock remains significantly below its all-time high of nearly $200, which was reached almost four years ago [3] - The stock dropped below $90 in 2022 due to challenges from the Coronavirus pandemic and targeted boycotts [3] - Since then, shares have been on a slow recovery path, with potential for increased revenue streams in the upcoming years [4]

Core Insights - The Walt Disney Company has achieved significant progress in its direct-to-consumer (DTC) business, reaching operating profitability for the first time in Q1'24 [2] - The company is accelerating capital returns with a $3.0 billion stock buyback and an increased dividend, enhancing its attractiveness to dividend investors [2] - Disney aims to achieve a $7.5 billion cost savings target, which is expected to be a key catalyst for future growth [2] Subscriber Growth and ARPU - Disney+ has seen a growth in domestic subscribers, reaching 54 million by the end of Q2'24, with an addition of 7.7 million subscribers year-over-year [5] - The average revenue per user (ARPU) for Disney+ increased by $0.86 to $8.00 domestically and by $0.73 to $6.66 internationally [5][7] - Subscriber momentum and ARPU growth are critical for the ongoing success of Disney's DTC business [5] Profitability of DTC Business - Disney's DTC segment reported an operating income of $47 million in Q2'24, marking a significant turnaround from previous losses [10] - The DTC business has experienced a $634 million improvement in profitability compared to the previous year, indicating a major milestone for the company [10] - Continued growth in subscribers and ARPU is essential for maintaining this positive trajectory [10] Free Cash Flow and Capital Returns - Disney is projecting at least $8 billion in free cash flow for FY 2024, representing a 63% year-over-year increase from FY 2023 [12] - The company’s free cash flow guidance is driven by subscriber growth and cost-cutting measures [12] - Higher free cash flow could lead to increased capital returns to shareholders, enhancing investment appeal [13] Valuation and Market Position - Disney's current price-to-earnings ratio stands at 18.6, which is considered reasonable given its expected earnings growth [14] - The company is undergoing a cost restructuring and may raise subscription prices to further improve DTC profitability [15] - A fair value range for Disney's shares is estimated between $164 and $175, contingent on achieving cost savings and improving operating income [15]

Core Points - Disney and Florida Governor Ron DeSantis are negotiating a new development agreement that could lead to up to $17 billion in investment from Disney over the next 10 to 20 years, including plans for a fifth park near Orlando [1] - The new agreement includes a minimum initial capital investment of $8 billion within the first ten years, focusing on infrastructure, new construction, and technology [2] - Disney is also committed to developing at least five major theme parks in Orlando and may convert hotel land use for additional office space, potentially relocating 2,000 staff from California [2] Group 1 - The new agreement will replace a previous 30-year development deal and requires a final vote to become official [3] - Disney has recently secured a similar agreement with Anaheim for Disneyland, allowing for mixed-use environments and new zoning permissions [3] - The company has announced a $60 billion investment commitment for its parks worldwide over the next 10 years, although specific details remain limited [3] Group 2 - Competition from Universal Studios, particularly with the upcoming $1 billion Epic Universe expansion, is influencing Disney's strategic decisions [4] - Disney CEO Bob Iger acknowledged awareness of Universal's plans and emphasized a strategic approach to capital deployment [4] - The Experiences division reported a 10% revenue increase to $8.4 billion, with operating profit rising 12% to nearly $2.3 billion in the latest quarter [4] Group 3 - International parks, especially Hong Kong Disneyland, contributed to revenue growth, while Disneyland faced challenges due to higher costs despite increased attendance [5] - The company anticipates flat growth in parks for the current fiscal third quarter, citing normalization of post-COVID demand and evidence of global moderation in travel [6]